Ending the mini cab trade’s long-standing exemption from paying the congestion charge risks cutting driver pay and harming competition, according to the head of one of London’s biggest cab operators.

Transport for London is currently assessing the economic impact of lifting the exemption which has been in place since the congestion charge came into operation in 2003.

If implemented, the move could help slow the growth in the number of mini cabs operating in the capital, commonly cited as a key factor in central London’s worsening congestion.

It could also help generate millions of pounds of additional revenue for TfL which is experiencing a serious funding crisis in the wake of government cuts and Mayor Sadiq Khan’s decision to freeze fares.

However Andy Boland, Chief Executive Officer at Addison Lee, says scrapping the exemption would provide a competitive advantage both to the black cab trade, which would continue to be exempt, and those mini cab operators backed by investors “who have subsidised fares”, while forcing others to either scale back investment or pass the cost onto drivers, “significantly” reducing their earnings.

Boland estimates that levying the £11.50-a-day charge would cost the industry as much as £250 per driver per month and says this level of additional overhead could not be absorbed while maintaining investment in cleaner vehicles.

He warns that any move which saw drivers continue to operate older, less clean vehicles would undermine City Hall and TfL’s own ambitions of tackling air pollution.

In a public letter to TfL and the Mayor, Boland warns: “Given the competitive nature of the market, fares would be unlikely to rise to reflect any imposition of the Congestion Charge. There would therefore be no change in demand, and no improvement to the environment.”

Instead of ending the congestion charge exemption, the CEO says “it would be far more effective to focus on the laudable Ultra-Low Emission Zone and on installing more charging points for electric vehicles.”

The executive’s public criticism is significant because Addison Lee has previously defended TfL’s tightening of regulations affecting the mini cab industry and backed a significant increase in the fees paid by operators.